Hearing on value-based healthcare – ways and means

“The Centers for Medicare and Medicaid Innovation have failed in many ways to advance cost-effective ideas.”

WASHINGTON, DC – The current fee-for-service model, which reimburses providers for providing care rather than for improving health outcomes, has increased Medicare spending but failed to improve patient health and contributed to physician burnout. Value-based payment systems that pay health care providers for their patients’ outcomes are a promising concept that could improve patient health, promote coordinated care, and contain Medicare spending.

At a House Appropriations Committee Health hearing on the current state of value-based healthcare, witnesses agreed that the Center for Medicare and Medicaid Innovation (CMMI) has failed in its mission to move away from fee-for-service and implement value-based models that have the potential to improve health outcomes. For example, only four of 49 CMMI models were given the green light for expansion over the last decade. As a result, the entire innovation center, originally intended to save taxpayer money, now costs money and is expected to continue costing $1.3 billion over the next decade.

Health care providers shared their experiences with value-based care, noting that providers in rural areas are largely excluded from participating in value-based care models and that the Biden administration has shifted the program’s focus from saving money and improving patient outcomes to models that promote “health equity.”

The Center for Medicare and Medicaid Innovation drops the ball

In his opening speech he said: Health Subcommittee Chairman Vern Buchanan (FL-16) laid out some of the fundamental problems that arise when implementing value-based care. This payment model has shown the potential to improve patient health and reduce taxpayer spending on health care. But under Biden, CMMI has largely failed to find ways to advance solutions. From a new focus on “health equity” to a lack of opportunities to engage physicians and stakeholders to actual costs to taxpayers, CMMI has “dropped the ball.”

Representative Buchanan: “When implemented correctly, value-based care leads to lower healthcare spending and healthier lives. In fact, studies show that value-based care can lead to annual healthcare savings of nearly $700 per patient and improve health outcomes. While this transition to value-based care has been a laudable and bipartisan initiative in the past, the Centers for Medicare and Medicaid Innovation, have failed in many ways to advance cost-effective ideas.”

Rural providers are left out

A 2021 Government Accountability Office report found that only 12 percent of providers in rural areas participated in value-based care arrangements, compared to 15 percent in the rest of the country. As a result, rural patients who suffer from more chronic diseases are denied access to better health care promoted by some value-based care models. A West Virginia physician and Chief Medical Officer of Main Street Health, Dr. Sarah Chouinard, shared Rep. Carol Miller (WV-01) how Medicare’s current value-based models create barriers for rural providers, such as high administrative burdens. Dr. Chouinard also shared practical solutions from her experience that help reduce the high administrative burdens for rural physicians.

Representative Miller: “Unfortunately, with Medicare’s value-based care models, we have now seen several cases where rural providers have been left behind and unable to participate. According to a 2021 Government Accountability Office report, rural providers participate in value-based care programs at lower rates than non-rural providers… Dr. Chouinard, what do you think are the main factors that prevent our rural physicians from participating in value-based payment systems?”

Dr. Sarah Chouinard, a physician from West Virginia: “At the top of the list is the administrative burden. In small practices, it is very difficult to put together a team that first understands what the opportunity is and then follows it and produces the associated reporting…On top of that, we’re just so busy. The need for care is so high that in order to make that change, we need a lot of technology and tools… there’s a kind of feeling of throwing your hands up in the air because it’s getting too difficult.…One of my fears is that we are losing doctors in rural areas because it is just too difficult.”

Value-based care promotes prevention and better health outcomes

Instead of paying for additional services when a patient is already sick, value-based care incentivizes health care providers to offer preventive treatments. Brad Wenstrup (OH-02) asked witnesses to provide examples of preventive care from their practice. A North Carolina physician spoke about how value-based care has led his practice to offer cancer screenings to patients who otherwise would not have received them under a traditional fee-for-service model.

Wenstrup: “When you talk about cost savings through prevention, tell me some ideas about what you are doing to keep people healthy.”

Dr. Stephen Nuckolls, physician from North Carolina: “One of the programs we launched earlier this year is low-dose cancer screening for smokers. There are a lot of smokers in our area. We really started tracking pack-years and … We introduced this quality measure, although it’s not one of the ones that are included in the program. We have been very successful in detecting many cancers early. As an ACO, we spend a little more money up front, but we know that it is an investment in the long-term health of our patients. A problem arose… Medicare only covers the cost up to age 77. That was a dilemma in our committee… We are in the expanded scope, which means we keep 75 percent of the savings. In that scenario, I told the doctors, if we were paid by Medicare for it, they would get $100. If you don’t bill Medicare for it because it’s not covered, you would still get an additional $25 through the shared savings. Does it make sense not to order it for $25? Of course not. We said, “Just do it for these patients.” We had that freedom because we consider this money our own and because we are here to protect the Medicare trust funds because we ourselves are at risk.”